Royal Dutch Shell and Exxon Mobil are planning to re-enter the Somali market ahead of an oil block bid round later this year, said in a report from the country’s oil ministry.
Before the fall of Dictator Mohamed Siad Barre in the early 1990s, Shell and Exxon Mobil had a joint venture there.
Since Barre left, Somalia has been mired in insecurity and is fighting Islamist al-Shabaab group, which commonly carries out bombings in Mogadishu city and elsewhere in the nation.
The nation presently produces no oil, but manufacturing could transform the economy as early seismic information showed that important offshore oil reserves could occur.
“(An) agreement was signed in Amsterdam on June 21 2019 and settles issues relating to surface rentals and other incurred obligations on offshore blocks,” the ministry said.
The parties also agreed on a scheme to transform their existing agreements according to a new oil bill adopted previously this year.
Somalia hopes to allocate a prospective November bid date to 15 offshore blocks. A road show will be held in late September or early October in Houston, Texas.
Somalia has also enacted an agreement on revenue sharing, dividing income with oil-producing countries, but has not yet decided on the government’s share in the blocks it awards.
